ADV traders have a very predictable habit of selling into the news while time and time again since early Nov we have seen buyers accumulate strongly at the 3c line. Very clearly we can trace back all the way back to April and see the shift from announcement causing spikes in share price to selling into the news with the share price making higher lows in the days following. Looking at the volumes traded over the last moth we have had an influx from the high 1s and low 2s to push us into 3. The shares are shifting from the traders to accumulators.
The big moves have always come 2-3 days AFTER the strong announcements after traders have sold off (
https://www.google.com/finance?q=ASX:ADV&ei=r5JYWLmZKYKH0gTcxJqgBA). No point complaining, with a registry this size the low volume drifting is inevitable as traders/holders become inpatient.
The news flow is only increasing with many updates coming:
- 13 remaining Seymour assays
- graphite drilling update and subsequent assays
- Wisa Lake due diligence
- JORC resource in Q2 2017
- MOU Offtakes upon quantum being identified (buyers at this stage have told BB they will buy what we have)
In both Seymour and Wisa Lake they have only explored 5% of the total project area with visual presence of dykes in surrounding areas. The current resources also remain open with secondary formations running parallel 50m below (not currently targeted in current drilling program). The reason for moving quickly is to JORC up a small resource to fund the next phase of development to minimise dilution.
For all those comparing widths to CXO - keep in mind their resource is over 70m below ground while ADV has identified their resource at surface or very shallow (under 15m). The grades are consistently better than most ASX players out there.
Goes without saying I am very bullish as I have constantly been topping up at 3c but with all the discussions I've had with fellow shareholders and BB himself, there will eventually come a point where we re-rate. It's a matter of when rather than if. I am currently building a model alongside a fellow geo to calculate the NPV, VIR, IRR, CoS (therefore margin) of the resource so far.
Difficult to make capex assumptions as the most important step before designing your processing facility is to understand the total resource before selecting an optimum processing capacity which in turn determines your mine life. Opex will be significantly cheaper compared to WA players due to depth, labour and proximity to rail infrastructure. Watch this space!
